Microsoft Overtakes Apple as World’s Most Valuable Company with AI Push
In a significant development, Microsoft has surpassed Apple to become the world’s most valuable company, with a market valuation of $2.875 trillion. The rise in Microsoft’s shares, driven by its early lead in generative artificial intelligence, resulted in a 1.6% increase, while Apple experienced a 0.9% decline, bringing its market capitalization to $2.871 trillion. This marks the first time since 2021 that Apple’s valuation has dipped below that of Microsoft.
Apple’s Stock Dips Due to Downgrades and Regulatory Scrutiny
Apple’s stock has seen a 3.3% slide in January, primarily due to a series of downgrades that have raised concerns about sustained weakness in iPhone sales, particularly in key markets like China. Additionally, regulatory scrutiny of the arrangement that designates Google as the default search engine on iOS poses a threat to Apple’s services business, which has been a positive aspect in recent quarters.
Microsoft’s AI Push and Growth
Microsoft’s aggressive introduction of genAI-powered tools in 2023 through its collaboration with OpenAI has been a significant factor in its growth. The company briefly outpaced Apple as the most valuable company several times since 2018, notably in 2021 during concerns about the iPhone maker’s stock due to COVID-driven supply chain shortages. “It was inevitable that Microsoft would overtake Apple since Microsoft is growing faster and has more to benefit from the generative AI revolution,” said D.A. Davidson analyst Gil Luria.
Investigation into Microsoft’s OpenAI Investment
In related news, Microsoft’s $13 billion investment in OpenAI faces a potential investigation by European Union watchdogs, triggered by upheavals at OpenAI revealing deep connections between the two companies. The European Commission is evaluating whether Microsoft’s involvement warrants scrutiny under the bloc’s merger rules, potentially leading to a formal investigation and unwinding if it’s found to impede fair competition. This move follows a similar step by the UK’s Competition and Markets Authority as part of a broader examination of artificial intelligence.